- Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits
- Jan K. Brueckner, Shihe Fu, Yizhen Gu, Junfu Zhang
- Review of Economics and Statistics Vol 99, no 4, p.663-677
- #002362 20171016 (Published) Views:7970
- This paper develops a new approach for measuring the stringency of a major form of land use regulation, building height restrictions, and applies it to an extraordinary data set of land-lease transactions from China. Our theory shows that the elasticity of land price with respect to the floor area ratio (FAR), a building height indicator, is a measure of the regulation's stringency (the extent to which FAR is kept below the free-market level). Using a national sample, estimation allowing this elasticity to be city-specific shows variation in the stringency of FAR regulation across Chinese cities. Single-city estimation for Beijing shows that stringency varies with site characteristics.
- JEL-Codes: R140, R520
- Keywords: floor-area ratio, density restriction, urban development
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